Didyouknow 55% of Indians yet purchase insurance through their agents
-Over 40% change to agents for convenience, according to a PwC-CII statement
-Maximum insurers possess apps to ease the buying and claims compensation process, but the selection of these seems to be low
Meanwhile in India, insurance continues to be a push product, essentially due to its intricate structure that is challenging to understand. No miracle then that a current announcement by PwC India Pvt. Ltd, a consultancy firm, done beside with the Confederation of Indian Industries (CII) noticed that even today about 55% of Indians purchase insurance products from agents or brokers.
The report, titled Facing in a new age of Insurance – How India is Approving Emerging Technologies, stated convenience plays a huge role when it appears to purchase the insurance and 41% said this to be the cause for opting a distinct mode of purchase. Two hundred customers, agents, and insurers were examined for the report.
“The insurance sector is one area where a lot of individual interaction is required—not only for the fact that insurance is a push product, but also that it needs a lot of solicitation as it is a long-term responsibility. Even in today’s age, approximately 95% of online sales of products such as term plans, critical illness plans and Ulips (unit-linked insurance plans) is supported by call center executives,” said Rakesh Wadhwa, chief marketing officer, and executive vice-president, tactics, Future Generali India Life Insurance Co. Ltd.
Insurance insertion, which is classified as the ratio of insurance premiums spent and GDP (gross domestic product) of the country didn’t see a radical jump in the last 17 years. According to the report, discernment progressed from 2.17% in 2001 to only 3.69% in 2017. On the opposite, global penetration currently holds at 6.13%. “The overall penetration is hauled down by general insurance. Life insurance penetration is nearby to the global average. Within general insurance, the SME section in financial insurance, and the middle-income division (excluding HNIs and low-income groups) in the individual insurance side is inexpensive in terms of penetration,” said Abhishek Bondia, principal officer and managing director, SecureNow.in.
Life insurance is yet seen as a tax-saving tool, but it infrequently makes it to the list of key financial preparation tools. “To increase penetration in the country, it is severe in achieving the objectives of financial inclusion. The need is to run programs like the mutual fund industry did to broaden its base,” said Wadhwa.
Intermediaries proceed to remain important to the sector but experts said there is scope for traditional channels to adopt newer ways to make the buying process easier and faster. Bondia said the opportunity to digitize the methods is sufficient even in the traditional methods of selling. “For example, once an individual recognizes a particular plan with an agent, the entire buying process should be digitized. A policyholder should be able to fill the proposal forms, get assets examined, and make payment digitally,” he said.
Most insurers have apps to make the purchase and claims establishment process easier, but the adoption of these seems to be low. Though smartphone selection in India has grown at a rate of 19.43% during the period 2015–18 and is anticipated to grow by 7.80% by 2022, in the case of insurance, the selection of apps is still at a nascent stage, said the report. “An app needs to have high-frequency usage and particular benefits, otherwise it won’t be a high-grade idea to push app downloads where the usage gets restricted after a certain point of time,” said Wadhwa.
Every insurance goods come with various compositions and exclusions that are difficult to comprehend by most end-users. According to Bondia, user involvement across multiple distribution channels is not planned for unassisted sales. People who are habitual to simple tools like WhatsApp are unable to adjust with complex insurance apps, he added.
The report stated 67% of customers prefer to leverage aggregators or online programs which allow them to make planned and acquainted decisions by matching products. “The regulatory body hasn’t given consent to insurance companies to associate products on their owned platforms. Hence, individualistic platforms provided by web aggregators fulfill that need for connection and help customers make their own decisions,” said Wadhwa.
While the government and the insurance adjuster have been taking important steps to harness the market’s potential, a lot more requires to be done to widen the scope, said experts we spoke to. A large knowledge program talking about the advantages of life insurance is required to build trustworthiness among customers, said Wadhwa.